China Builds Gold Network to Strengthen Yuan’s Global Reach

Tue Aug 25 2026

China is expanding a global network of gold vaults and accelerating central bank gold purchases as Beijing seeks to strengthen the yuan’s role in international trade, according to an S&P Global Ratings report.

China’s strategy combines greater official gold accumulation with efforts to expand its influence over physical gold markets beyond the mainland. China’s gold miners are also expected to grow faster than many international competitors after Beijing reclassified gold as a “strategic mineral” in 2025.

China launched its first offshore gold delivery vault in Hong Kong last year under an agreement with the Shanghai Gold Exchange (SGE), with Bank of China (Hong Kong) serving as the designated operator. The move was accompanied by the SGE’s listing of two new yuan-denominated gold contracts, which can be settled through physical delivery or cash settlement.

The offshore vault is the first part of a broader network China is considering in major international gold trading centres. Cities identified for possible additional vaults include Singapore, Kuala Lumpur, Dubai, Riyadh and Moscow.

The proposed network would provide international participants with additional links to China’s physical gold market while potentially supporting countries seeking greater control over where their gold is stored. The initiative connects the expansion of yuan-denominated gold trading with a wider effort to strengthen China’s position in the global gold system.

China’s official gold holdings have continued to rise. As of the end of July 2026, China’s gold reserves stood at 76.08 million ounces, marking the 21st consecutive month of accumulation.

S&P Global Ratings data showed China ranked sixth globally in gold reserves, behind the US, France, Italy, Germany and Russia.

China’s push is also being reinforced by government policy and the expansion of Chinese mining companies overseas. Last year, nine top government departments, including the National Development and Reform Commission, published an industrial outline aimed at improving the security, capacity, operations, innovation, scale and mine resources of the gold industry.

Strong domestic demand for gold bars and coins, combined with government support, has encouraged Chinese miners to pursue overseas mergers and acquisitions.

Zijin Gold International, a unit of Zijin Mining, acquired two profitable mines in Ghana and Kazakhstan over the past year. The acquisitions helped drive the company’s first-half net profit up 179% year on year to US$1.45 billion in 2026.

However, China’s overseas expansion is facing tighter scrutiny. In late July, Zijin Mining terminated a planned takeover of Canada’s Allied Gold Corp, instead taking a 9.2% minority stake for about US$295 million amid Beijing’s tightening scrutiny of outbound overseas investments.

Taken together, the vault network, rising official gold holdings and overseas mining expansion point to a coordinated effort to deepen China’s role in global gold markets while creating greater international utility for the yuan.

Source: https://slguardian.org/